Competitive Performance With Lower Risk


Our approach to value investing focuses on companies with large capitalizations in established industries which we believe will increase their earning power, are paying an at- or above-market dividend, and whose current valuations suggest that they are underpriced because of low market expectations.

To fully articulate this approach and ensure a consistent discipline, we have established a rigorous, four-step investment process which prescribes all aspects of building and managing our Large Cap Value portfolios:

1. Generate investment ideas from carefully chosen research sources. We use data from price and profitability screens, corporate financials, and information from company and industry meetings and presentations. We learn about companies' products, profitability, plans and people during our assessment of current positions and future prospects. Companies exhibiting the potential to improve returns on capital/equity attract our attention.

2. Build a case for a particular holding by identifying reasons why the company may achieve or sustain above-average return on capital and/or equity. We focus on changes that are likely to have positive long-term effects on return on capital, such as:

  • Improved margins and/or balance sheet 
  • Better utilization of assets and cash flow 
  • Changes in industry structure and/or management team 

3. Assess the attractiveness of current valuation of earning power, including price/earnings and price/book ratios and other fundamental measures that have been proven for decades to produce investment success.

4. Determine the enhancement to the portfolio. The selection should have a positive impact on the overall portfolio direction and diversification. We add stocks to the portfolio to:

  • Increase portfolio average earning power
  • Improve average valuation measures
  • Enhance overall diversification to manage risk


Competitive Performance With Lower Risk